RI Emergency on Illegal Textile Imports

BULETIN TEKSTIL.COM/ Jakarta – For illegal textile imports, Indonesia has entered a ’emergency’ phase. The influx of imported textile items is also contributing to the deterioration of the domestic textile and textile products (TPT) industry.

It reveals a very substantial disparity between Indonesia’s import records controlled by the Central Statistics Agency (BPS) and China’s export statistics to Indonesia based on data from the General Customs Administration of China, according to data from the International Trade Center (ITC).

According to this statistics, the disparity or discrepancy will be relatively substantial in 2022, hitting US$2.94 billion or the equivalent of IDR 43 trillion, while China’s TPT exports to Indonesia for HS CODE 50-63 would reach US$6.5 billion. Meanwhile, the TPT import figure based on BPS data is only US$3.55 billion.

“If imports per container are assumed to be worth Rp. 1.5 billion, then it is estimated that around 28,480 illegal TPT containers will enter per year, or around 2,370 illegal containers per month,” said Redma Gita Wirawasta, General Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), in Jakarta on Friday (15/9/2023).

According to him, the amount of illicit TPT imports increases year after year. In reality, Redma said, it was still less than $2 billion some years ago.

When compared to the value of people’s textile consumption in 2022, which is expected to reach US$16 billion, illegally imported items account for 41% of the market.

“This means that 41% of TPT consumed by the general public is unlawful. This is obviously highly harmful since illegally imported items do not pay import fees and taxes, allowing them to be sold very cheaply on the domestic market, while local products cannot compete,” he noted.

According to Redma, China’s TPT shipments to Indonesia for HS CODE 50-63 were US$ 6.5 billion, equivalent to 800 thousand tons or around 45% of the domestic manufacturing capacity of small and medium-sized garment industry (IKM).

“800,000 tons per year, if done by SMEs, could employ approximately 2.4 million people, not to mention the manufacturing of cloth, thread, fiber, and other supporting industries.” “The economic multiplier-effect is very large, apart from government income from the tax sector, also from electricity use, BPJS payments and so on,” he said.

As a result, Redma requested that the government act decisively both on the import and market distribution fronts. “This has been neglected for years, until now the condition of the national textile industry is chronic, several companies have closed, some have turned off many machines and many employees have been subjected to rationalization because utilization has fallen,” he said.

Then Redma remarked that the identical issue occurred in a number other industries. According to the same statistics source, the export-import imbalance between Indonesia and Singapore would reach US$17 billion in 2022.

“So the biggest gap is with Singapore, but if you break it down, illegal imports from Singapore are dominated by electronic products, while illegal TPT is still dominated by China,” Redma said.

“As a result, we request that the government act decisively both on the import and distribution sides of the market.” The national textile sector is now in crisis. “Some companies closed, some turned off machines, so employees had to rationalize because utilization fell,” he said.

API requests that the government improve protection against the invasion of foreign textile items.

The Indonesian Textile Association (API) has requested the government to increase entry barriers for textile goods and textile products (TPT) imports. This is due to the present slowdown in the domestic textile sector, which is mirrored in the drop in export orders.

According to API data, over 66% of garment products in the domestic market are imported from China, with the remainder coming from Bangladesh (8%) and Vietnam (6%). Concerns regarding the dominance of imported clothing items from China stem from the occurrence of TPT product excess in that nation.

Chairman of the Indonesian Textile Association (API)

“Export destination countries protect themselves very strictly. Meanwhile, Indonesia is handicapped by poor protection for imports of raw materials, auxiliary materials, and completed goods,” stated Jemmy Kartiwa Sastraatmaja, General Chair of the Indonesian Textile Association (API), during the API CEO Gathering event in Jakarta on Friday (1/9/2023).

(Red B-Teks/Ly)

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